Summary
MAS proposes a new Alternative Funds Appendix to the CIS Code to accommodate innovative fund types that may not comply with existing investment requirements. Two initial fund types are identified: (1) futures-based single-commodity funds (gold, silver, platinum, crude oil, iron ore) and (2) a wider range of single-country government bond funds (with credit rating requirements removed). Guardrails include product-level requirements, enhanced disclosures, and clear labeling as "alternative funds." MAS aims to determine guardrails for new fund types in ~3 months, with similar funds authorized in 21 days.
Key Points
- Alternative Funds Appendix: new appendix for fund types that deviate from Appendix 1 investment requirements (diversification, concentration limits)
- Futures-based single-commodity funds: permitted commodities are gold, silver, platinum, crude oil, iron ore; must track well-recognized futures price index; minimum 90% exposure to single commodity; max 100% NAV in derivatives; must be labeled "futures" not "ETF"
- Single-country government bond funds: credit rating requirements removed; must invest in well-recognized international index constituents; minimum 6 issuances, max 30% per issuance; enhanced sovereign risk disclosures
- Guardrails: product-level (liquidity, concentration limits), enhanced disclosures (risk factors, target customer segment), distribution safeguards (complex products classification)
- Timeline: ~3 months to design guardrails for new fund type; 21 days to authorize similar funds once guardrails established
- Foreign fund recognition: MAS will recognize comparable foreign funds under the new framework
- Feedback deadline: August 10, 2026